On Wednesday 22 November, the Chancellor of the Exchequer delivered the Autumn Budget to Parliament. The “gig economy”, where individuals are engaged by businesses on a flexible, ad-hoc basis, was on the agenda. Mr Hammond announced that the Government will publish a discussion paper on employment status.

In particular, this will explore the case for reforms to make the employment status tests for both employment rights and tax clearer. The emergence of the gig economy has caused well-documented confusion for employers in determining employment status, and has given way to much-publicised litigation as a result.


The paper will form part of the Government’s response to the Taylor Review which was published in July. The Taylor Review, which we reported on in July , set out that there should be reforms so that all gig workers are reclassified as dependant contractors, giving them access to statutory benefits.


In addition to the gig economy being in the spotlight on Wednesday, the Work and Pensions and Business, Energy and Industrial Strategy Committees have also published a joint report and draft Bill to regulate the gig economy, and to address issues raised in the Taylor Report. Whilst it recognises that legislative reform would not put an end to litigation, it aims to prevent confusion by providing clearer legislation on employment status.

In particular the Bill makes the following recommendations:

  • That the Government legislates to introduce greater clarity on definitions of employment status
  • That worker status should be the default position for those employed in the gig economy
  • A pilot to include a pay premium for workers with non-guaranteed hours
  • An extension of the time allowance for a break in service while still accruing employment rights for continuous service from one week to one month
  • Higher fines and costs orders in the Employment Tribunals against businesses who have previously been unsuccessful in a similar case
  • A duty to provide written employment terms to workers as well as employees
  • Enhanced rights for agency workers
  • Punitive fines and naming and shaming of employers who do not comply with the Law.

If legislation a “worker by default” position is introduced, it will mean that businesses will have to prove that the people they engage with are not workers. They would also be required to provide a basic safety net of statutory rights that would give better protection to workers. The Committees believe this approach will alleviate confusion for both workers and employers, reduce exploitation and reduce the burden on the courts.

Finally, the Bill highlights that even if ‘worker’ status is achieved it does not necessarily mean job security. It therefore suggests that a wage premium above National Minimum Wage/National Living Wage on non-guaranteed hours could prompt employers to offer more stable work such as providing shift details and rotas to staff in advance.

Watch this space for further developments…

If you have any queries on employment status or any other HR queries, please do not hesitate to contact Joanne Holborn , Tom Scaife or Caroline Rayner on 01228 552600 or 01524 548494 .